Social Giving Contest: Big Payout or Big Pain?

01-03-2012

A new trend in corporate giving makes it easier for millions of people across the nation to decide where corporate dollars should go through online contests. These social giving contests are seemingly a great opportunity for nonprofits to gain exposure fast and earn money for their organizations.

Large corporations like JPMorgan Chase, Kohl’s and Pepsi encourage the public to vote online for their favorite charity. In turn, the corporation gives away hundreds of thousands of dollars to the winning organization.

Many of the corporations use Facebook to generate votes. For example, the Chase Giving Community created a Facebook page where Facebook users could vote for their favorite charity. Out of the more than 500,000 charities nominated by users, the top 200 were awarded grants ranging from $25,000 to $1 million depending on their final ranking. Over two million people voted to help donate $5 million.

The question is who is getting the bigger payout – the charity or the corporation? Social giving contests are great ways for corporations to gain publicity and they are an opportunity for select nonprofits to receive a large financial gift. However, these gifts come with a price. The viral marketing campaign that is created in order to generate the high number of votes needed to win the grant only serves to reinforce the company’s brand. While it can be argued that the campaign does reinforce the companies’ commitment to give back to the community, it can also be argued that the campaign comes at a price to the nonprofit that can’t be taken lightly.

For the 498,000 nonprofits that didn’t win, social giving contests can mean a loss of time and resources that they cannot afford. Even though big corporations and larger nonprofits are seeing positive results, this may not always be the case for smaller charities. Social media contests are exhausting the resources of small, grassroot nonprofits who find the payoff of $25,000 to $1 million grants too hard to resist. These nonprofits work to actively promote themselves online and in the community to essentially win a popularity contest. Large nonprofits have more resources and can dedicate the time needed to participate and compete in social giving contests. Long-time supporters can become weary of constant requests for votes and may eventually become disinterested. If a nonprofit is constantly asking its supporters to vote for the organization, these supporters may ignore future information put out by the nonprofit because it seemed to work harder to promote the contest then the mission it fights for.

Another caveat is that voters’ personal information is not always anonymous. Many corporations, like Chase and Pepsi, request that voters provide contact information before being able to cast a vote which makes the voter a marketing pawn in the name of a good cause.

Social giving contest do not foster long-term relationships. Someone may vote for a nonprofit once and they may never do anything for that organization ever again. Chase boasts on their Facebook page that social giving contests serve as a national platform to promote nonprofits’ missions, help them to attract new supporters, and gain visibility with millions of Chase Community Giving fans. Although some exposure may be gained from the contest, nonprofits need action and continued volunteer and donor support in order to survive. For the most part, social giving contests do not foster these relationships.

Social giving contests give money to organizations that know how to manipulate online contents and media, not necessarily the most worthy charity, and the competitiveness to beat out other well-meaning nonprofits can turn ugly. Some organizations may use deceptive practices in order to win. With an eye on the prize money, nonprofits can quickly lose sight of their values and mission.

When making the decision to pursue social giving contests nonprofits should weigh the pros and cons carefully. From exhausting their own internal resources to fatiguing volunteers with the constant requests of voting, the better choice may be to hold a local fundraiser, launch a new appeal or write additional grant proposals.